Placer County paring spending next year with $720.4 million budget

With questions on the state budget still unanswered, Placer County has forged a $720.4 million spending plan of its own for the coming fiscal year that is 4.9 percent lower than the current budget.
The Board of Supervisors voted Tuesday to approve the proposed spending blueprint for the July-to-June fiscal year that drops expenditures from this year’s $757.7 million.
The budget outlook is based on reduced revenues and a tax revenue forecast that remains shaky.
Unlike the past three years, which supervisors and staff admitted during Tuesday’s budget hearing were brutal on the bottom line, the county will not have to dip into its depleted contingency fund to close the gap. The fund now stands at $8.2 million – down from $18 million in 2008.
Graham Knaus, county finance and budget operations manager, outlined the challenges anticipated by the county in the coming year that have been factored into the proposed budget. Supervisors will be making final adjustments to the budget in August and adopting a final spending plan in September.
Knaus said a further 5 percent drop in property tax revenues is anticipated during the next budget cycle, meaning a decrease of up to $4.8 million in revenue.
Looking at the bigger picture, Knaus said that there is still uncertainty in the state and local economy, with unemployment hovering at 11.9 percent statewide and 10.9 percent in Placer County. That compares with 6 percent three years ago in the county.
The real estate market also remains volatile, with a steady increase in sales and values dipping in the last month into negative territory. That could mean a further drop in housing values and another decrease in property tax income for the county, he said.
“The question with real estate is will the temporary declines continue or was it a blip in the continuing recovery,” Knaus said.
Holly Heinzen, assistant county executive, said the 5 percent estimate on dropping property values is good for the coming year and another fall would be reflected in next year’s numbers.
“Property tax appeals have declined this year,” Heinzen said. “Although we still have more than anyone would want to see.”
Since 2007, the county has imposed a hiring freeze, left 343 positions unfilled, instituted 21 days of mandatory time off and increased the employee share of pension and health costs.
Knaus said that a budget deal in the coming weeks at the state level would answer questions about the future of the county’s redevelopment agency and how public safety taxes would be distributed.
If the county has major new challenges after decisions by state legislators, Knaus said that it could dip into the $8.2 million general fund reserve and several other reserves, including open space funds, capital projects and infrastructure spending.
Board Chairman Robert Weygandt declared that the budget remained healthy “overall” despite the huge impact of a down economy, especially in construction, which had driven growth in Placer County during the 2000-2007 boom years.
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Boiling it down: Placer County proposed budget
-The 2011-12 budget is $720.4 million
- That’s $37.3 million less than the current fiscal year’s $757.7 spending plan
- It’s down $144.9 million from 2008-09’s $865.3 million final budget
Source: Placer County